Lockheed Martin will pay roughly $29.5 million to resolve federal claims that it discriminated against White workers in pay and falsely certified that it followed civil-rights laws as a government contractor. The Justice Department and EEOC announced the settlement on Tuesday, Washington Technology and 24/7 Wall St. reported; HR Dive covered it on Wednesday.
The settlement is split: $22 million to the U.S. for alleged False Claims Act violations, and around $7.5 million to over 1,000 employees via the EEOC for claimed race bias in reviews, bonuses and pay. Tim Booher, a former Lockheed vice president whose whistleblower lawsuit in the Northern District of Texas prompted the False Claims Act part, gets $4.4 million.
The dispute centers on a "Compensation Adder" program Lockheed launched in 2021. The government said the program added a raise for the 20% highest-ranked workers in each business unit, and that HR staff pressured leaders to replace selected nonminority employees with minority workers until race-driven statistical "flags" disappeared. According to Booher's complaint, HR instructed him to remove 18 White employees from the compensation list and substitute non-White employees, concentrating on "cuspers" near the 20% threshold. He claimed his objections were answered with threats of "legal activity," and a supervisor said he would "get used to" it. Justice further contended that Lockheed had internal workforce targets based on race and sex, set manager bonuses partly on demographic preferences, and used 2023 hiring goals described as "aspirational plus".
The EEOC portion settles a 2025 Commissioner's Charge filed by EEOC Chair Andrea Lucas. Lucas said the resolution reflects an enforcement priority against unlawful race and sex discrimination "carried out by employers under the euphemism of diversity, equity, and inclusion". A settlement document states that "Lockheed denies that it engaged in the covered conduct and denies the allegations in the civil action". According to the government, this is the biggest group of employees ever to receive money through an EEOC settlement over claimed Title VII violations linked to DEI programs. The EEOC agreement requires Lockheed to maintain a workplace based on merit, and the agency can check compliance while it is active.
The settlement follows similar federal contractor cases. Associate Attorney General Stanley Woodward Jr. noted that the Lockheed deal is DOJ's fourth False Claims Act settlement resolving claims of racial bias against workers, following ones with IBM, Deloitte and Accenture. Lockheed's overall payment exceeds Accenture's $25 million settlement, though the False Claims Act component by itself is smaller.
The cost is small relative to Lockheed's operations. The company reported third-quarter net earnings of $1.8 billion, so the settlement equals about 1.6% of that quarter's earnings. The company also posted a record order backlog of $292 billion and lifted its 2026 revenue forecast to $80–$82 billion.
Lockheed Martin said in a statement it settled "to avoid the distraction and expense of prolonged litigation." The company added: "We continue to deny the allegations, which relate to past practices. We did not admit liability, determining it would be best for all involved to put these matters behind us so we can remain focused on our critical national security mission".
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Inès Moreau covers how companies are run and how people work for Venturist. She writes from company announcements, surveys and published reporting.